BRUSSELS 13 OCTOBER 2017. Today, the EU environment ministers adopted their position on the Effort Sharing Regulation (ESR) which covers emissions from the transport, building, agriculture and waste sectors in the 2021-2030 period. As the EU’s largest climate tool, the ESR is key to implementing the Paris Agreement in Europe. Loopholes adopted today by the governments, however, put the delivery of the EU’s climate commitment at risk.

The objective of the Effort Sharing Regulation is to deliver emission cuts of 30% in the transport, agriculture, waste and building sectors by 2030, but the numerous concessions could mean that in reality, merely 23% emission reductions are attained. This is very close to the reductions projected to be achieved without any additional climate efforts.

The loopholes include an inflated starting point for emission reductions, the ability to exploit forest credits or surplus allowances from the EU carbon market to stall climate action in the ESR sectors, and a carry-over of 115 Mt unused pollution permits (‘hot air’) from the past.

Femke de Jong, EU policy director at Carbon Market Watch commented:

“Today, the ministers missed their chance to show true climate leadership, and instead opted to support loopholes that put EU’s climate action in jeopardy and allow countries to continue with business-as-usual until 2030. In the following talks, the Parliament must stand up for the EU citizens who consider climate change a major threat and want their governments to take urgent action.”

While most governments are trying to avoid their climate responsibilities, cities and regions across Europe are taking ambitious action that not only will deliver about a third of Europe’s 2020 target, but also comes with co-benefits such as cleaner air, more comfortable homes, and healthier homes.

Femke de Jong:

“A strong effort sharing law, without loopholes, can boost local climate action. Unlocking this potential would allow Europe to enhance its climate ambition and improve the quality of life for the millions of Europeans living in cities.”

As a next step, the European Parliament, the EU Member States, and the EU Commission will start informal negotiations, the so called trilogues, to align their positions in order to adopt the final law.

The Effort Sharing Regulation (ESR) is the EU’s largest climate law after 2020 as it will cover about 60% of the Union’s total greenhouse gas emissions. The law aims to reduce the EU’s emissions from sectors such as transport, buildings, agriculture and waste management by 30% in 2030 and sets national climate targets for each EU Member State in the 2021-2030 period.

The position adopted by the EU environment ministers includes the following elements:

• No change in the starting point that sets a misleading baseline by not reflecting reality and rewarding countries for stalling climate action. European Parliament’s position aligns better the starting point with actual emissions levels, which means that significantly less emissions would be released up to 2030 compared to the Council position.
• A new loophole in the form of a ‘safety reserve’ that rewards countries lagging behind their 2030 target to receive a maximum of 115 Mt CO2e in carbon permits from those countries that will overperform. This ‘hot air’ reserve risks widening the divergence of per capita emissions in Europe. The European Parliament had earlier this year proposed to set up a ‘hot air’ reserve equalling a maximum of 90 Mt CO2e.
• No change in the amount of allowances from the oversupplied EU carbon market (EU ETS) that can be exploited for lowering climate action in the ESR. Positively though, countries can decrease the number of surplus ETS allowances they will use to offset ESR emissions twice during the 2021-2030 period.
• No change in the amount of land use and forestry offsets that can be used to compensate for agriculture emissions, keeping the 280Mt limit as proposed by the Commission.
• A small adjustment of the 2021 target for Latvia and Malta.